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Behaving economically with the truth

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All about understanding people and their behaviour

Life Business Government Society Religion

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Always start by calling your audience liars….

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Social animals…

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Apr 7, 2023Month Yr

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Quick summary

We are unreliable witnesses to our own behaviour and motivations We think much less than we like to think we think We are much more influenced by other people than we like to admit

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Intuitive Judgement

“A bat and a ball cost $1.10 in total. The bat costs $1 more than the ball. How much does the ball cost?”

“People are not accustomed to thinking hard, and are often content to trust a plausible judgement that quickly comes to mind.” Daniel Kahnemann, Nobel Prize Winner

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Human behaviour driven by two independent brain systems, 1 & 2 …

ExplicitSlow

AnalyticalLearned

PropositionalConscious

System 2

ImplicitFast

IntuitiveInstinctive

Metaphoric Unconscious

System 1

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Implicit has greater processing power (and is less effortful)

System 2

System 1

50 bit/sec

11,000,000 bit/sec

Zimmerman, M. (1989) "The Nervous System in the Context of Information Theory".

“We are not thinking

machines that feel; we are

feeling machines that think”

Antonio Damasio

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Current view is that emotion simply helps message cut through…

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Current view is that emotion simply helps message cut through…

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But new evidence reveals that the most effective advertising draws people closer to the brand…

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Paul Ekman – how to measure emotion?

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As seen in ‘Lie To Me’ Hit TV Series based on Paul Ekman’s work

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“Which of these faces best expresses how you feel about this ad?”

“To what degree did this ad make you feel

[selected emotion]?”

“And what was it about thisidea that made you feel this way?”

FaceTrace® - Measuring Emotional Appeal

BrainJuicer® 2006

Contempt

Surprise

Anger

Disgust

Happiness

Sadness

Fear

NeutralCaptures ‘Reasons for Emotion’

1Award Winner

2007

2007Award Winner

2007

Award Winner

2007

2007

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But none of this applies to me….

We are unreliable witnesses to our own behaviour and motivations We think much less than we like to think we think We are much more influenced by other people than we like to admit Our emotions drive our behaviour much more than we like to think

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How we make decisions

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How we make decisions

Case number across the day

Prop

ortio

n of

favo

urab

le d

ecis

ions

Danziger et al, 2011

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“The performance of more effortful tasks will collapse undercognitive load. […] People are not accustomed to thinking hard, and are often content to trust a plausible judgement that quickly comes to mind.”

Daniel Kahneman, Nobel Prize Winner

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Local Environment Influences

5:1 1:2

A. North, D. Hargreaves and J. McKendrick (1997)

Sales Sales

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Choice Influences

4

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1712

100 98 100 100 100 100

86

% of drivers donating organs

Johnson & Goldstein (2003)

Tick the box if you want to participate in the organ donor programme

Tick the box if you don’t want to participate in the organ donor programme

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Social Influences

Bateson et al, 2006

People pay 2.76 times more on average

when eyes are present

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Behavioural Economics: How our decisions are guided

Local & Choice Environment

Social Influences

Inherent Individual Biases

27Wansink & Just, Cornell University

Small nudges have been shown to work

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Basics of Behavioural Economics

Loss Aversion — how the desire to avoid losses crowds out gains

Endowment Effect — how owning something increases its apparent value

Chunking — the psychology behind why simple tasks are easier than complex ones

Prospect Theory — Kahenman & Tversky’s grand theory designed to bring their work on heuristics together

Status Quo Bias — the influence the desire to see things stay the same plays

Gambler’s Fallacy — the most famous example of poor probability reason and confusion over causation

Self-serving bias — the tendency to only notice evidence that supports one’s case, while conveniently over-looking evidence to the contrary

Money Illusion — the tendency to concentrate on nominal number values over real-spending power or economic value

Framing Effect — the central psychology effect that means that identical conditions can be made to ‘feel’ different.

Mental Accounting — the influence of ring-fencing, labeling and tagging certain funds of money for specific purposes.

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Behavioural Economics

People’s decisions are often influenced in ways they can’t really explain or articulate

Identifying “hidden” influences can offer real commercial advantage and provide answers to social and cultural problems

An appreciation of Behavioural Economics can inspire approaches that help us see, understand and predict behaviour better

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How Behavioural Economics challenges traditional research assumptions

We are socially isolated individuals with relatively stable preferences

All our choices are the result of a deliberative, linear and controlled thought processes

People are benefit-maximising and cost-minimising

Behaviour change is brought about through:

– Increased awareness of the issue

– Better information

– Education

The right incentives will help people change their actions

We are socially connected with very malleable preferences

People are motivated by factors beyond benefit-maximisation and cost-minimisation

There are more effective ways to bring about behaviour-change than through:

– Raising awareness

– Providing better information

– ‘Educating’ people

Monetary incentives are not always necessary to get people to change their actions

Our choices are often impulsive and the result of non-linear thought processes

Traditional perspective Behavioural Economic perspective

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Behavioural Economics (Human Heuristics)A New Social Science Discipline

We go with flow

We’re present-biased

We behave in the moment

We maintain a positive self-regard & consistent self-image

We copy

We do what’s expected of us

We’re altruistic

We reciprocate

We’re influenced by our environment

Choices are relative – behaviour depends on options available and how they are presented

Our decisions are based on what we can

store and mental short-cuts

We perceive ‘value’

inconsistently

Individual FactorsSocial Factors

Environment (Physical & Choice Environments)

Messenger stronger than message

We’re much more likely to do something if we make a public commitment

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What do we believe in?

“Market research at its best is mind expanding & profit enhancing, not just risk reducing. At best, it’s full of insight &

illumination that informs & inspires great marketing. At worst, it’s a 120 page insurance policy heavy on numbers, light on insight and

usually dead-on-arrival.

BrainJuicer’s mission is simple. To significantly improve quantitative research, by translating a generation of breakthroughs in

psychology, behaviourial economics & social sciences into Juicy tools that better explain & predict human behaviour.

Great researchers, applying Juicy tools on behalf of brave clients makes for better marketing, bigger brands & a rapidly growing business with potential to change the way research is done.

John Kearon, Chief Juicer

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Have fun with your knowledge and tools

Contempt

Surprise

Anger

Disgust

Happiness

Sadness

Fear

Neutral

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Sometimes

We ask the wrong people We ask them the wrong questions We ask them in the wrong way

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But all is not lost……

Companies have more data on the actual behaviour of their customers than ever before Companies can conduct more experiments on claimed and actual behaviour than were ever

possible before Companies can use different methods to understand their consumers and to build their

businesses

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Thank you

Contact me on :-alex.batchelor@brainjuicer.com and +44 7710 943140